Your net worth is the difference between your total debts and total assets. There are many online tools and apps to help you figure out your net worth, or you can do the math yourself by using a pencil and paper or an Excel spreadsheet. It’s helpful to find out your net worth once, but what’s really valuable is to keep track of your net worth on an ongoing basis. Keep in mind, net worth is a moving target, and it’s normal for it to fluctuate as the value of your assets and debts changes. Still, what we hope for is a net worth that is generally increasing over time, despite minor fluctuations. The idea, of course, is to build your net worth so you can retire comfortably and meet your other financial goals.

Broadly speaking, there are two ways to increase your net worth. One is to reduce your debt. You can do this by paying off existing debt as soon as you can (it’s a good idea to pay of high-interest debt first) and cutting back on expenses (e.g., stop buying stuff you don’t need). If you do that, you should be able to increase your savings rate – the other step you can take to increase your net worth. Try maxing out your 401(k) and IRA contributions and investing in income-generating assets, such as dividing-paying stocks.

Knowing your net worth can make a big difference in your spending and saving habits. Adding up your assets and debts could be an eye-opener: Many people have a good idea of how much money they make, but absolutely no idea of how much they spend.

The item that goes hand-in-hand with net worth is a budget. If you create (and stick to) a budget, your odds of increasing your wealth go way up since you’ll be controlling exactly where your money is going. (To learn how, see The Complete Guide to Planning a Yearly Budget.)

Managing your finances obviously takes time and effort – there’s a lot of number crunching, after all. But even though it’s work, it’s a lot easier than not having enough money to pay your bills or ending up broke in retirement. The key to reaching your goals is to start taking control of your finances today. And that starts with knowing where you actually are.